Smart cities is a work in progress

Smart cities is a work in progress

The Union Cabinets approval to the Smart Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) is the first formal indication of how the NDA proposes to address Indias urban challenges. According to the PIB release (April 29, 2015), the Smart Cities Mission will aim at enhancing the quality of urban life and providing a clean and sustainable environment to about 100 cities, employing smart solutions for the efficient use of the available assets, resources and infrastructure. The mission is proposed to be implemented using an area-based approach which will consist of (1) retrofitting, i.e. providing services to those city pockets which are deficient in them; (ii) redevelopment, i.e. reconstruction of those city pockets where other interventions are unlikely to bring improvements, (iii) city-wide improvements such as intelligent transport solutions, and (iv) greenfield smart cities. Although the PIB release does not define the term smart city (a problematic word that has come to mean a million things), it describes what the mission will focus on in terms of core infrastructural services, how cities aspiring to become smart will be selected, and what will be the institutional arrangements for its implementation.

I must state that the UPA-2 had also considered a proposal for the development of smart cities and laid out its vision in the 12th Five Year Plan, but did not pursue it on grounds that the country was not ready for the development of smart cities, that there was a large gap between the profile of a smart city in whatever way it may be defined and the profile of Indias existing cities, and bridging that gap needed fundamental changes in the legal, institutional and financial structures of cities which were hugely demanding and knotty. What is interesting is that NDAs vision of smart cities is substantively not much different from that outlined in the 12th Five Year Plan.

AMRUTs make-up and the premises on which it is based are similar to that of JNNURM. AMRUT aims at equipping 500 cities with infrastructural services such as water, sewerage, storm water drains, transport and development of green spaces and parks. The implementation of AMRUT is linked to a set of reforms which are drawn, in part, from the JNNURM and in part from those given in the 12th Five Year Plan. Surprisingly, AMRUTs reform agenda leaves out several of the key JNNURM reforms, viz reform of rent control laws, reduction in stamp duties and adoption of the double-entry, accrual-based accounting system for reasons that at this stage can at best be speculated upon.

Either the NDA does not consider them important enough to be continued or holds the position that these belong to the big bang category which, as Arvind Subramanian says, India is not ready for or assume that these have been implemented under JNNURM and no further investment in them is necessary. Here too, I must state that these three reforms formed a part of the Urban Reforms Incentive Fund (URIF) initiated by Atal Bihari Vajpayee, who recognised that these were vital to Indias urban transition. The UPA-1 concurred with his assessment and subsumed themin fact, the entire URIF agenda within the ambit of JNNURM. In the absence of these reforms, it is unclear how will the NDA implement the redevelopment component of the Smart Cities Mission which requires, at the very least, doing away with control laws (most derelict areas in large cities are under rent control), or how will the NDA reduce the black money menace whose one of the sources, as every government knows, happens to be high stamp duties in real estate transactions, or how will rating agencies determine the fiscal health of municipalities in the absence of accrual-based accounts?

NDAs decision to launch these two missions is, however, fortuitous on at least two counts. One, an extraordinarily large amount of work is currently under way worldwide on smart cities. Building smart cities is said to be one of the first new industries of the 21st centurya $100 billion jackpot. Most observers note that there is no single vision of a smart city, it has many shades and that it is work in progress. While the promise of smart solutions or technological fixes involving the use of powerful sensors, digital-enabled buildings, surveillance and security command centres, synapses and smart grids to transfer information at high speeds to solve city-level problems of traffic, overcrowding, water and power crises, and waste collection and disposal is seductive, the NDA has to make a conscious choice between the likes of Songdo (South Korea) which presents to the world a quixotic vision of smart cities, and the vision of Jane Jacobsthe late celebrity author of the Death and Life of Great American Citieswho argued that cities have the capability of providing something for everybody, only because, and only when, they are created by everyone. Thus, the NDA has a wide choice. The question is, how much of the technological fixes is it willing to trade with a plan where citizens define their priorities? What is the algorithm, even if it is tentative? Will states have a choice in deciding the kind of smart city they are comfortable with? Or will the 14 countries who have committed to support the Smart Cities Mission help the government strike a balance?

Two, there exists within the now-defunct Planning Commission and the ministry of urban development a rich stock of knowledge on how a mission linked to reforms should (or should not be) implemented. The story of JNNURM reforms is all before us; from a stage where its implementation followed, quite conscientiously, the established protocols, its implementation in the post-2010 period became perfunctory, violating almost every norm that one would associate with due diligence. There are countless instances of how the country was led into believing that the 74th Constitutional Amendment has been fully implemented in x number of states; amendments to rent control laws have been carried out in y number of states, and z number of municipalities had reached 85% property tax collection. Nothing could be farther than the claims made and put out on the ministrys website! Nothing could be more misleading than the manner in which progress on the implementation of JNNURM reforms was being assessed. AMRUT is founded on sound premisescities and towns in India are heavily constrained on account of structural and systemic weaknesses and their elimination is a sin qua non to taking Indias urban agenda forward.

AMRUT must not fall victim to the clerical ways of assessing the progress on reforms; if there is one lesson that must be learned from JNNURM is to resist the temptation of demonstrating to the world that all is well with the mission.

In what way would the two missions contribute to the process of Indias urban transition? Here, two facts appear contextually important. First, contrary to the claims often advanced in this newspaper that India is in the midst of rapid urbanisation and that smart cities offer an effective route to addressing consequential urban challenges, Indias urban transition has been and continues to be a painfully slow process. In terms of the level of urbanisation, India ranks 193rd out of a sample of 231 countries for which the UN World Urbanisation Prospects provide the relevant data. Nor is Indias rate of urbanisation any higher compared with the average for the developing countries.

At the current level of per capita income, India runs an urbanisation deficit of about 8%! Thus, any assumption that the Smart Cities Mission is meant to deal with rapid urbanisation would be a misrepresentation of its role. India needs more and not less urbanisation.

Second, India suffers from low quality urbanisation. Low quality is not limited to the quantity and quality of services in cities; it shows across spheres, in fragmented institutions, weak financial systems, increasing working poverty, tardy growth of formal employment and poor housing conditions. All this has put Indian cities at a disadvantage in terms of business, private investment and FDI flows. The much-touted FDI flows into India are just a shade less than 2% of global FDI flowsChinas share is about 8.5% and even Brazil and Mexico account for 4.4% and 2.6% of global flows. While upgrading the quality of urbanisation across these spheres is perhaps one of the most daunting challenges the country faces today, it is not clear from the design of Smart Cities Mission and AMRUT whether they will address these issues, apart from improving and augmenting the level of services. This is only one facet of urban transition.

The Smart Cities Mission and AMRUT are important initiatives. It is necessary that they are taken forward with as much clarity as can be imparted into their design at this stage. As these missions get ready for launch on June 25, they still have anomaliesAMRUT is proposed to be taken forward with the support of a set of reforms, the Smart Cities Mission has no such protocol. The former seeks empowerment of urban local bodies (ULBs), the latter plans to use special purpose vehicles. Where do they produce synergies?

The two missions are complex. There are no established methodologies for defining, conceptualising and implementing them. Smart cities in most countries are on the drawing board. The scale and complexity of cities is drawing in the best minds of physics, mathematics and computer science experts to mine the urban data and to study how cities grow and adapt to the changing situations. In New York City alone, three university departments have been set up with an explicit focus on urban science. The NDA needs to be bold enough to accept that these missions will evolve and develop as they are implemented across states and not freeze their design in year one.